Do i REALLY need to regear???

I have a 2012 crew cab z71 5" rcx lift factory 20's and currently running 295/60/20 trail grapplers with factory 3.42 gears, hypertech max energy on 87 tune, and magnaflow exhaust. I do not off road and very rarely will i tow anything. I have noticed with these tires my 6th gear is pretty much useless, so i have been just putting the truck in M5 and driving. I am avg. about 16 mpg right now. Is it really worth the $1500.00 to regear to 4.56 gears? Would my mpg really go up much? I have also been debating on going down in tire to help instead of gears and maybe this would allow me to use 6th gear with my 3.42s, looking at a 275/65/20 toyo open country at2 since truck is never off road. Thanks for your help!

You hit directly on part of the issue, the money spent regearing will take a long time to recoup at the pump.
Another part of that is the money you might have to spend for premature wear on parts because of running larger tires, it's a fact larger tires wear-out drive train components faster, just how much seems to vary.
And finally the performance factor of your truck, with those tires I'm sure throttle response, take-off speed, towing, and in certain terrains just plain driving are affected.
Only you really know how much this is worth to you, you already know app. the cost of a regear.

275/65/20 are a much lighter tire and not near as aggressive, therefor i would figure it would be alot easier to push around and could free up 6th gear and maybe some more mpg. Please let me know if i am wrong?

the 275/65/20 is about the same height and almost an inch narrower. They weigh 20lbs less (57 vs 77 lbs), so yes it will help some with the mass of tire the truck needs to push. Your effective gear ratio of the two tires are the same compared to stock (about a 3.2 effective gear ratio so not much taller than the stock 3.42). You may get some mileage back due to the lower weight but you are still less aerodynamic with the lift. So you may also get the use of 6th gear back but I cant say for sure, sorry.

Also arent the tires gonna cost roughly 1000-1200 for purchase and install as well which is around the cost of gears. In which getting 3.73 would put you back to stock performance (not necessarily mpg due to lift and tires). Kind of a balancing act. with either tire the truck will be a little under powered but may work for you.

For example I put 4.10 in my truck instead of 4.56 when I lifted due to it, at the time, being a daily driver and I did mostly highway driving. So the 4.10 kept my mileage close to stock but it definately has to work harder in the city to get moving. I will probably regear it again to 4.56 eventually as its not a daily driver any more and especially if I start to do more than the very occasional towing.

the 275/65/20 is about the same height and almost an inch narrower. They weigh 20lbs less (57 vs 77 lbs), so yes it will help some with the mass of tire the truck needs to push. Your effective gear ratio of the two tires are the same compared to stock (about a 3.2 effective gear ratio so not much taller than the stock 3.42). You may get some mileage back due to the lower weight but you are still less aerodynamic with the lift. So you may also get the use of 6th gear back but I cant say for sure, sorry.

Also arent the tires gonna cost roughly 1000-1200 for purchase and install as well which is around the cost of gears. In which getting 3.73 would put you back to stock performance (not necessarily mpg due to lift and tires). Kind of a balancing act. with either tire the truck will be a little under powered but may work for you.

For example I put 4.10 in my truck instead of 4.56 when I lifted due to it, at the time, being a daily driver and I did mostly highway driving. So the 4.10 kept my mileage close to stock but it definately has to work harder in the city to get moving. I will probably regear it again to 4.56 eventually as its not a daily driver any more and especially if I start to do more than the very occasional towing.

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The tire shop i buy from will swap me strait across for a smaller tire

ok gotcha. Then cross out the cost comment as the rest still applies. If they are gonna do a straight swap you are mainly going to a tire that is an inch skinnier and 20 lbs lighter. Even has a little less aggressive tread which may help mpg as well. At the cost of free, doesnt hurt to try as I dont think it will change the looks/cosmetics of the truck.